LITTLE ROCK — Since passage in 2010, Republicans in the Arkansas Legislature have argued that the state should not waste time and money preparing to implement a federal health care law they said would likely be overturned by the U.S. Supreme Court or repealed by an anticipated Republican regime in Washington.

Now that the law has been mostly upheld by the nation’s highest court and election results in Washington have made repeal unlikely, Arkansas lawmakers have no choice but to address the issue of how, and how fully, to implement it at the state level.

President Obama’s signature policy achievement is unpopular with Republicans, who had some success as the minority party in thwarting legislative implementation of Obamacare two years ago and next year will outnumber Democrats in the Legislature for the first time since Reconstruction.

On Tuesday, the GOP won 21 of the state’s 35 Senate seats and captured 51 seats in the 100-members House, compared to Democrats’ 49 seats and one seat held by a Green Party member. A Democrat who lost his race in northeastern Arkansas is seeking a recount.

One of the biggest issues on the table for the 2013 regular session is whether to expand the state Medicaid program under a provision of the health care law that the Supreme Court has said must be optional for states. Gov. Mike Beebe supports the expansion, but in an interview the day after Tuesday’s election he acknowledged that with a GOP-controlled Legislature, it will be difficult to obtain the three-fourths majority vote needed to approve spending federal money on the expansion.

He said the situation comes as no surprise.

"(I said) it was going to be close to 50-50 legislatively, so nobody was going to be close to 75 percent," he said. "So if the two sides can’t get together and figure this stuff out, then it is what it is."

Sen. Michael Lamoureux, R-Russellville, who was elected Senate president pro tem-designate on Thursday, said he expects Medicaid expansion to be the biggest issue of the session that starts in January. Asked if the expansion has a chance of winning legislative support, he said, "Nothing is ruled out at this point."

Beebe has said that based on the estimates of the state Department of Human Services, the state can afford the expansion, which is estimated to add 250,000 Arkansans to the Medicaid rolls.

DHS officials have said that when factors such as an increase in the federal matching rate for the ARKids First children’s health insurance program, state income taxes on the increased federal Medicaid funding and a reduction in state spending on uncompensated care are taken into account, the expansion would save Arkansas $372 million over the first several years.

The federal government would pay the full cost of the expansion for the first three years, and after that Arkansas would pay a gradually increasing percentage. When the state’s share of the cost tops out at 10 percent, the annual net cost to the state would be $4 million, according to DHS.

But some Republican legislators say they are not comfortable with DHS’ estimates.

"Arkansas can’t afford to expand Medicaid," said Rep. David Meeks, R-Conway. "In three years I still believe that we would have to figure out how to come up with $150 million to $200 million, and I’m not going to push that off to a future legislative body."

Republicans point to projections that the Medicaid program will see a shortfall of between $250 million and $400 million in the next fiscal year and say now is not the time to expand the program. Beebe says the influx of federal funding that comes with the expansion will lessen the impact of the shortfall, and that his initiative to change the way health care providers are paid will save Medicaid dollars in the long run.

Under the initiative, doctors in some fields are to be paid for episodes of care rather than for each service provided. That, too, is likely to be challenged by Republicans, some of whom say they are working on alternative reforms that would focus on the behavior of patients rather than doctors.

Rep. Nate Bell, R-Mena, said ideas he is considering include increasing co-pays for services that are abused and requiring drug tests for people receiving Medicaid benefits. He said he was not talking about kicking people off Medicaid, necessarily, but "incentivizing them to get in treatment, which will ultimately enhance their ability to get a job and hold a job and hopefully begin to become more self-supportive."

Sen.-elect Uvalde Lindsey, D-Fayetteville, who supports the Medicaid expansion and Beebe’s payment reform initiative, said he believes compromise is possible and that ideas from both parties may ultimately be adopted, including changes that give patients incentives to change their behavior.

"You don’t want to disenfranchise the most needy … or keep them from getting coverage and the health care that they need, but having skin in the game just makes good common sense," Lindsey said.

The state also is preparing to operate a federally mandated health insurance exchange where Arkansans can shop for policies that suit their needs. States had the option of running the exchanges themselves, but like many other states, Arkansas declined that option because of Republican opposition, so the plan now is for the state to run the exchange in partnership with the federal government.

States also have the option of letting the federal government run their exchanges entirely. Cynthia Crone, planning manager for Arkansas’ exchange, said she hopes the new General Assembly does not push for that option.

"I would think they would want state control as much as possible, rather than ceding it all to federal control," she said.

Bell said he remains opposed to "any steps" to implement any aspect of the health care law.

"I think a state-run exchange is no different than a federally run exchange except that we have the responsibility for doing things that aren’t good for the state. If it’s going to happen, let the federal government do it," he said.